3 CHAPTER JOB COSTING
JOURNAL ENTRIES - Page 110
FOR THE YEAR ENDED 12/31/09
DESCRIPTIONS
W/P
<1>
Raw Materials
Accounts Payables
Bought Raw Materials (both direct and indirect)
Cr.
90,000
90,000
<2>
Work In Process - DM Job 603
Work In Process - DM Job 604
MFG Overhead
Raw Materials
(Materials Requistioned - materials into production)
40,000
72,000
0
112,000
<3>
Manufacturing Overhead
Raw Materials
(To transfer IM into Production
2,000
2,000
<4>
Work In Process - DL Job 603
Work In Process - DL Job 604
Manufacturing Wages
(Apply labor to Jobs & Mfg Overhead - IL)
10,000
20,000
30,000
Manufactruing Overhead
Wages Payable
(To record Indirect labor)
13,000
13,000
<5>
Manufacturing Overhead - Plant Depreciation
Manufacturing Overhead - Plant Utilities
Manufacturing Overhead - Prepaid Insurance Expired
Manufacturing Overhead - Plant Proprty Taxes
Accounts Payables (utilities)
Accumulated Depreciation
Prepaid Insurance
Property Tax Payable
(To record Actual Overhead Costs)
4,000
3,000
1,000
2,000
3,000
4,000
1,000
2,000
<6>
Work In Process - OH Job 603
Work In Process - OH Job 604
Mfg Overhead
(To Apply Overhead - See sheet 3)
8,000
16,000
24,000
<7>
Finished Goods
Work In Process
(Allocate Cost of Goods Mfg (finished goods)
166,000
166,000
<8>
Accounts Receivables
Cost of Goods Sold
Sales Revenue
Finished Goods
(To record Sale and transfer of costs to P&L)
<9>
Cost Goods of Sold
Manufacturing overhead
(To close out the ending OH account (temp acct))
TOTALS
Dr.
207,000
154,400
207,000
154,400
1,000
1,000
n/a
809,400
809,400
10,000
BB
Raw Materials
100,000
90,000
Ending
BB
IM
IL
Deprec.
Utilities
Insurance
Prop Tax.
Ending
WIP & FG - TO & TI = Cost of Goods Mfg
2,000
112,000
78,000
Overhead
0
2,000
13,000
4,000
3,000
1,000
2,000
24,000
BB
DM
DL
OH
1,000 <9> EB
Work In Process
0
112,000
30,000
24,000 166,000 TO*
Finished Goods
12,000
154,400
BB
TI*
EB
0
166,000
23,600
0
Manufacuring Wages
2,000
30,000
Accounts Payable
90,000
3,000
Wages Payable
30,000
13,000
Accumulated Depreciation
4,000
Accounts Receivables
207,000
Sales Revenue
207,000
Prepaid Insurance
1,000
Job
BB
DM
DL
OH
Totals
Units
$ Per unit
603
604
40,000
72,000
10,000
20,000
8,000
16,000
58,000 108,000
50
60
1,160
1,800
Totals
0
112,000
30,000
24,000
166,000
Cost of Goods Sold
154,400
(Mfg OH)
1,000
155,400
STANDARD (PLANT WIDE) METHOD TO ALLOCATE OVERHEAD
Predetermined MFG Rate =
Total Estimated Overhead Costs
Estimated Driver
Driver:
Direct Labour Hours
Direct Labor Costs
Machine Hours
Predetermined MFG Rate =
(Estimated OH)
(Estimated DL Hours $)
1,000,000
62,500.00
16
For every $1 of DL costs, we will allocate 80 Cents of OH to WIP..
What was the Total DL ?
How much OH is allocated?
Total OH Allocation
See Journal Entry # 6
603
500
604
1000
16
16
8,000
16,000